Posts Tagged ‘Gordon Moodie’

Mergers and Acquisitions — 2013

Posted by Andrew R. Brownstein, Wachtell, Lipton, Rosen & Katz, on Monday February 4, 2013 at 9:48 am
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Editor’s Note: Andrew R. Brownstein is a partner in the Corporate Department at Wachtell, Lipton, Rosen & Katz. This post is based on a Wachtell Lipton firm memorandum by Mr. Brownstein, Steven A. Rosenblum, Adam O. Emmerich, Mark Gordon, Gordon S. Moodie and Eitan Hoenig.

As we enter 2013, a number of signs – including the strong finish to 2012, macroeconomic factors that appear to be reducing business uncertainty, and intensifying competition in many critical sectors – provide cause for optimism that the breadth and depth of M&A activity will be significantly greater in the coming year than in 2012. Global M&A activity dropped 17.4% in the first three quarters of 2012 compared to the comparable period of 2011, reflecting the European sovereign debt crisis, political uncertainty in the United States and slower economic growth in China and India. But M&A activity turned sharply upward in the fourth quarter: Global announced deal volume for the quarter was the highest in four years, and a number of transformative transactions were announced, including Freeport McMoRan Copper & Gold’s $9 billion acquisitions of Plains Exploration Company and McMoRan Exploration, and ICE’s $8.2 billion acquisition of NYSE Euronext.

…continue reading: Mergers and Acquisitions — 2013

Understanding RiskMetrics Compensation “GRId”

Posted by Adam O. Emmerich, Wachtell Lipton Rosen & Katz, on Tuesday June 1, 2010 at 9:31 am
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Editor’s Note: Adam Emmerich is a partner in the corporate department at Wachtell, Lipton, Rosen & Katz focusing primarily on mergers and acquisitions and securities law matters. This post is based on a Wachtell Lipton firm memorandum by Mr. Emmerich, Eric S. Robinson, Jeannemarie O’Brien, David E. Kahan, Gordon S. Moodie and Justin S. Rosenberg. The RiskMetrics GRIds system has been previously discussed on the Forum in a series of posts, which are available here; Another aspect of the RiskMetrics system – its independence from a company’s ownership structure – is discussed in a study by the Program titled The Elusive Quest For Global Governance Standards, which is available here.

As discussed in our memos of March 16, 2010 and May 13, 2010, RiskMetrics has recently released the guidelines for calculations under its Governance Risk Indicator (GRId) rating system. The GRId instructions include over 50 pages of compensation questions, the answers to which result in a stand-alone Compensation GRId rating.

The Compensation GRId questions and scoring generally reflect the substantive positions in RiskMetrics’ corporate governance policies and proxy voting guidelines, but in some cases are more punitive. For example, the proxy voting guidelines penalize excise tax gross-ups only in new or materially amended agreements, but the Compensation GRId deducts even for existing agreements with gross-ups. More significantly, the rigid scoring system by its nature codifies the level of emphasis on particular issues. While we do not think the one-size-fits-all GRId approach provides a useful picture of governance practices, most public companies will, given the prominence of RiskMetrics, find it useful to familiarize themselves with the GRId guidelines and identify areas where points can be scored with little risk of substantive harm. For example, in a number of cases addressing an issue in the annual proxy statement may increase a company’s score.

…continue reading: Understanding RiskMetrics Compensation “GRId”

Understanding RiskMetrics Shareholder Rights “GRId”

Posted by Adam O. Emmerich, Wachtell Lipton Rosen & Katz, on Tuesday May 25, 2010 at 9:12 am
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Editor’s Note: Adam Emmerich is a partner in the corporate department at Wachtell, Lipton, Rosen & Katz focusing primarily on mergers and acquisitions and securities law matters. This post is based on a Wachtell Lipton firm memorandum by Mr. Emmerich, Eric S. Robinson, Trevor S. Norwitz, William Savitt and Gordon S. Moodie. Another aspect of the RiskMetrics system – its independence from a company’s ownership structure – is discussed in a study by the Program titled The Elusive Quest For Global Governance Standards, which is available here; previous posts regarding the “GRId” system are available here.

As we described in a prior memo, RiskMetrics has replaced its Corporate Governance Quotient (CGQ) with Governance Risk Indicators (GRIds). Using the new GRIds methodology, RiskMetrics will identify the level of concern (low, medium and high) for each company across four categories of corporate governance metrics used by RiskMetrics: Board Structure, Compensation, Audit and Shareholder Rights. Unlike CGQ, the GRIds metrics are both transparent – anyone can calculate a company’s scores by answering specified questions about its governance structure – and absolute – the scores are company-specific and do not depend upon practices of other companies. One of the GRIds metrics, called “Shareholder Rights,” seeks to measure corporate takeover defenses.

…continue reading: Understanding RiskMetrics Shareholder Rights “GRId”

Court Upholds Exclusion of 14a-8 Proposal For Deficient Proof of Stock Ownership

Posted by Trevor Norwitz, Wachtell, Lipton, Rosen & Katz, on Friday March 12, 2010 at 1:50 pm
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Editor’s Note: Trevor Norwitz is a partner in the Corporate Department at Wachtell, Lipton, Rosen & Katz, where he focuses on mergers and acquisitions, corporate governance and securities law matters. This post is based on a Wachtell Lipton firm memorandum by Mr. Norwitz and Gordon S. Moodie. The post relates to the case of Apache Corporation v. Chevedden, which was previously discussed on the Forum in this post.

In the first federal judicial decision addressing the requisite proof of share ownership for submission of proposals under Rule 14a-8, a U.S. District Court has upheld, on narrow grounds, a company’s exclusion of a shareholder proposal for failing to comply strictly with the proxy rules. Apache Corporation v. Chevedden, C.A. H-10-0076 (March 10, 2010).

The case involved a precatory shareholder proposal from activist John Chevedden to eliminate supermajority voting. To prove his eligibility to submit the proposal under the proxy rules (which require continuous ownership for one year of just $2,000 in market value of a company’s voting securities), Chevedden provided a letter from Ram Trust Services (RTS), his “introducing broker”. Apache rejected this as deficient because RTS was not a record holder of its stock and gave Chevedden the requisite 14 days to provide proper proof of ownership. Chevedden later – more than 14 days after the deficiency notice – gave Apache a letter from Northern Trust, RTS’ custodian participant in the Depository Trust Company (DTC), the registered holder of the shares in question. Apache asserted that it could exclude Chevedden’s proposal because neither RTS nor Northern Trust was a record holder. Rather than seeking a “no action” letter from the SEC staff, Apache filed suit seeking a declaratory judgment that only a letter from DTC, the actual registered holder, would suffice.

…continue reading: Court Upholds Exclusion of 14a-8 Proposal For Deficient Proof of Stock Ownership

 
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